Bed Bath & Beyond (NASDAQ: BBBY) will report its fourth quarter results after market close on Wednesday. Analysts are expecting the company to earn $1.60 per share on $3.22 billion of revenue.

The last time Bed Bath & Beyond reported earnings on January 8, the company earned $1.12 per share, missing the consensus estimate by three cents. Revenue of $2.87 billion fell short of analyst expectations of $2.89 billion.

Shares plunged more than ten percent on January 9 as the company lowered its fourth quarter guidance as management projected its earnings per share to be in a range of $1.60 to $1.67, down from previous guidance of $1.70 to $1.77.

Investor sentiment failed to improve after analysts at Wedbush projected that home sales will increase at a low single-digit rate in 2014, which prompted the analysts to downgrade Bed Bath and Beyond (as well as other retailers) to Neutral.

The following day, Bed Bath & Beyond lowered its fourth quarter outlook as the company noted that severe weather led to 464 times a store was closed for an entire day and 1,923 times a store was unable to operate for a full day.

Bed Bath & Beyond estimated that weather issues impacted neat earnings by $0.06 to $0.07 while comparable store sales for the quarter rose 1.7 percent compared with a previous model of an increase of approximately 2.0 percent to 4.0 percent.

The company also guided its earnings per share to be in a range of $1.57 to $1.61.

Mike Baker, research analyst at Deutsche Bank is not so concerned with the current quarter, but is very concerned over the company's outlook.

It's already known that weather impacted many retailers, but investors need to pay attention to management's comments if traffic started to normalize thus far in the first quarter.

Baker cautioned investors that there could be downside to the company's gross margins, which have declined year-over-year for the past eight consecutive quarters. Baker is forecasting gross margins to fall 70 bps year over year in the quarter, but actual numbers could come in worse due to increased price competition and increased use of couponing.

Investors will also be paying close attention to any commentary management provides regarding its continued investments in its ecommerce platform and a web site re-launch.

It is possible that management will offer further clarity on its cash-return policy, as Baker believes that a dividend announcement is imminent.

Baker is forecasting Bed Bath & Beyond to provide full year fiscal 2014 guidance and is expecting the company to earn $5.25 per share on comps up 2.3 percent and total sales up six percent. The consensus estimate is for the company to earn $5.28 per share on comps up 2.8 percent.

For the first quarter, Baker is forecasting Bed Bath & Beyond to earn $1.05 per share on comps of 2.3 percent versus a consensus estimate of $1.03 and 2.6 percent, respectively.

At the end of the day, unfortunately, there is still little visibility that these factors will significantly improve trends in the near-term. Working against the company's favor is the fact that the core business is still highly influenced by housing market trends.

“Given our less optimistic housing outlook, we temper our earnings expectations,” Basham wrote in a research note to clients on March 6.

Basham explained that Bed Bath & Beyond comps and stock price performance have shown a historical correlation with key housing market metrics, like existing home sales growth and median home sales price growth. Over the past two years, the company's comps have decoupled from the housing metrics, but this is due to company-specific issues, according to Basham.

“We encourage investors to look beyond choppy near-term sales trends due to the weather and consider the effects of slowing housing metrics on Bed Bath & Beyond's demand outlook,” Basham argued in his research note.

Basham is expecting Bed Bath & Beyond to earn $1.66 per share in the fourth quarter on revenue of $3.235 billion.

Basham is expecting Bed Bath & Beyond to earn $1.01 per share in the first quarter on $2.72 billion of revenue. For the full year fiscal 2014, earnings per share is guided at $5.22 on revenue of $12.057 billion.

Shares are Neutral rated with a price target lowered to $66 from a previous $86.